Why is Facebook After Atlas?

The cataclysmic drop in Facebook’s (NYSE:FB) stock price, which fell from its initial offering price of $38 per share in May to $17.72 on September 4, proved one thing: the social network had to make its one billion users profitable.

To this end, Facebook launched two closely linked advertising models in early September. The first, known as the mobile app network, enabled advertisers to target users with ads for websites based on the biographical and social data they included on their profiles, while Facebook Exchange, which became available a few weeks later, allowed advertisers to target ads to Facebook users based on their browsing history.

The company’s better-than-expected earnings report revealed that these two networks had already begun to have an effect on its advertising profits; total advertising revenue accounted for 86 percent of Facebook’s third-quarter revenue.

But the company is still far behind its rival Google (NASDAQ:GOOG) in terms of advertising monetization.

As AllThingsD reported on Thursday, the Social Network is now considering an acquisition as a means to boost advertising revenue. Facebook believes that Microsoft’s (NASDAQ:MSFT) Atlas media measurement platform, which delivers billions of impressions per day, could help the company develop a network capable of competing with Google. Facebook is also considering building its own platform.

Atlas was acquired by Microsoft in 2007 for $6 billion, but as sources told the publication, “the new price for Atlas will be substantially lower.” The deal also may result in an advertising agreement between Facebook and Microsoft.